Wallet Development

Private key in MetaMask — 12-word seed phrase in browser extension. Unacceptable for retail. For corporate treasury — unthinkable. Wallet architecture choice determines compromise between convenience, security, and regulatory compliance.

Custodial vs Non-custodial

Custodial — provider stores private key. User authenticates via email/password/OAuth. Account recovery trivial. KYC/AML integrated at provider side. For centralized apps with financial operations — sometimes only regulatory option.

Problem: provider is single point of failure and trust. Compromised provider (Bitfinex 2016, $72M; FTX 2022, $600M+ client funds) means user loses everything.

Non-custodial — user has keys. Provider has no fund access. User fully responsible for key storage. For 99% of people this is a problem.

MPC changes equation.

MPC Wallets

Multi-Party Computation — crypto protocol letting multiple parties jointly compute function (sign transaction) without revealing partial secrets. Private key never exists assembled.

Standard: 2-of-3 MPC between user (key share on device), provider server, backup cloud storage. Transaction signed by any two. Lost phone — recover via server + cloud. Compromised server — attacker has one share, cant sign.

TSS (Threshold Signature Scheme) — MPC for ECDSA/EdDSA. Algorithms: GG18, GG20, CGGMP21 (latest, fastest). Libraries: tss-lib (Go), multi-party-sig (Go), multi-party-ecdsa (Rust).

MPC needs no on-chain changes — signature looks standard to blockchain. Advantage over multisig: no extra gas, no on-chain governance hint.

Account Abstraction

EIP-4337 changes model completely. Instead of EOA (standard private-key address), use smart contract Account. Authorization logic in contract code, not protocol crypto.

Means: arbitrary signature logic, social recovery, session keys, sponsored transactions (app pays gas), batch operations in one transaction.

Stack: User → UserOperation → Bundler → EntryPoint contract → Account contract.

Practical possibilities: social recovery through guardians, session keys with restrictions, paymaster sponsor gas.

Hardware Security Modules

For corporate treasuries: HSM (Hardware Security Module). Key generated and never leaves secure chip. Signing inside HSM. Hardware attestation supported.

Solutions: AWS CloudHSM, Azure Dedicated HSM, Thales Luna, YubiHSM 2.

HSM + MPC optimal for institutional: key shares in HSM on different servers/jurisdictions, signing via TSS.

Timelines

• Custodial with basic UI: 4–8 weeks
• Non-custodial with MPC: 8–16 weeks
• EIP-4337 Account with paymaster: 6–12 weeks
• Institutional with HSM, multi-jurisdiction MPC, compliance: 4+ months